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Friday, March 19, 2010

In a down economy, be wary of health insurance scams

“Call right now, and you’ll also receive free vision and dental coverage!”

That quote is from a recent video pitch for one association’s health coverage. The problem: the plan was illegal. The policies were never filed with state regulators, nor was the insurer registered with the state.

As the economy has soured and health care costs soar, people desperate to find affordable health coverage need to be more wary than ever. What seems like a deal may well turn out to be an illegal plan, with no assurance that medical claims will actually be paid.

“People can get taken advantage of twice in these situations,” said Washington state Insurance Commissioner Mike Kreidler. “They pay the premiums in good faith, thinking they have solid coverage. Then they have problems getting claims paid, and are on the hook for those medical bills, too.”

Among the things to be wary of:

-Unreasonably low costs: One plan offered what sounded like comprehensive coverage for $199, regardless of health history. Consumers should be extremely cautious about plans that promise such bargain-basement rates for generous-sounding benefits. If it sounds too good to be true, it probably is.

-Unusual marketing, such as an unsolicited phone call, fax message or e-mail message.

-High-pressure sales tactics, such as suggesting there’s a special rate that expires unless you sign up immediately.

-Companies that want money up front before they’ll send you information about their products.

-Easy acceptance. Be cautious about companies that promise coverage with little or no health screening or questionnaire. Insurers, particularly those in the individual insurance market, often want to know about pre-existing medical conditions.

-Companies that offer little contact or location information. Be especially cautious if the only contact information is a toll-free number and the person on the phone seems vague or evasive about details.

If you suspect that an offer is really a scam, please call the Washington state Office of the Insurance Comissioner at 1-800-562-6900 to verify that the company is legitimate before you sign anything or provide any financial information to the company.